Big Nebraska cities will likely benefit from the $120 million rental aid refusal

Gov. Ricketts' decision to not apply for assistance is expected to set aside more money for Lincoln

LINCOLN, Neb. (Nebraska Examiner) – As it turns out, renters in urban Douglas and Lancaster Counties likely will benefit from Gov. Pete Ricketts’ refusal to apply for what has become a contentious $120 million in federal rental and utility aid to Nebraska.

It’s the state’s other 91 counties that are getting left in the lurch, losing out on a chunk of funding.

So says State Sen. Matt Hansen, the Lincoln lawmaker who made his legislative priority a bill aimed at forcing the governor, on behalf of Nebraska, to apply for the $120 million in Emergency Rental Assistance Program funds.

Ricketts has adamantly declined to apply for the second round of ERAP funds the federal government had set aside for Nebraska, saying that the “storm has passed” and that the subsidy would make families “more reliant on government.” On Tuesday, he vetoed Legislative Bill 1073, the measure that attempted to force his hand to apply for the funds.

LB 1073, while adopted by the Legislature, fell short of the votes needed for an emergency clause that would have pushed the application forward by a March 31 deadline to collect the full amount.

Now a vote to override the governor’s veto is scheduled for next Tuesday. However, Hansen said that because the March 31 deadline will have passed, the override could guarantee only that the state’s 91 counties (outside Douglas and Lancaster) would get a portion of the original funds —  about 40%, or about $51 million.

But here’s the new twist: Hansen said a clarification made Wednesday in federal guidance rules now allows the other 60% of the allotted $120 million to start flowing to Nebraska’s two biggest counties. That’s because Lancaster and Douglas Counties, as well as the Cities of Omaha and Lincoln, already have applied and are receiving emergency funding in their own right as separate municipalities.

Earlier, it was believed that the second-round funds now headed to Lancaster and Douglas would instead go to other states.

“So by not accepting the statewide funds (before the deadline), we’re expecting, actually, Lincoln and Omaha to get more funds since they run their own programs,” Hansen said.

The state’s two largest counties and two largest cities also benefited from the governor’s actions during the first round of funding. Because the first round funds weren’t fully spent in the 91 counties, Ricketts reallocated some of those funds to Omaha, Lincoln and Douglas and Lancaster Counties. He said the rest of the state apparently didn’t need the money.

Housing advocates have said the funds weren’t fully tapped because the state’s distribution process was too complicated.

Hansen said he just learned of the twist in the second round of funds Wednesday, in a discussion with the U.S. Treasury Department.

While glad to learn that much of the original funding could remain in the state, Hansen said he was disappointed that Nebraska’s 91 more rural counties lost out on the full amount of emergency rental assistance they might have had otherwise.

“It’s disappointing,” he said. “They need it there.”

Ricketts, on Thursday, said he remains opposed to taking a second round of ERAP funding.

“The Treasury Department’s only consistency with ERAP distribution has been its inconsistency,” he said when asked to respond to the new developments. “The Department has frequently changed its guidance to align with DC’s political whims, and that’s only likely to continue.”

Housing advocates expressed frustration and amazement at the latest turn of events.

Erin Feichtinger, director of advocacy and policy for Together Omaha, noted that there is time for rural Nebraska to salvage some of the second round of emergency rental funding. Looking toward the veto override vote, she urged senators representing the 91 counties to listen to constituents who need rent and utility assistance.

If not, she said, “rural Nebraska is going to lose out on $51 million to help renters, landlords and their local community organizations.”

Karen Rathke, of the Grand Island-based Heartland United Way, said the pandemic exacerbated the need for rent and utility assistance in rural communities. She said the workforces in those smaller communities are at stake.

“That is where these dollars go, to help people pay those bills. You have to have housing and utilities to go to work,” Rathke said.

She challenged the governor.

“Accepting these funds does not make a welfare state,” she said. “It makes Nebraska a state that offers a good life for everybody, not just those in Lincoln, Omaha, Douglas and Lancaster Counties.”

Ken Smith, economic justice director at Nebraska Appleseed, said he was heartened that the state’s urban areas could reap some of the emergency rental funds lost to Nebraska’s more rural communities.

He said 75,000 Nebraskans were behind on rent, many still feeling the impact of COVID-19.

“It’s just really important to highlight that there are folks outside of Omaha and Lincoln that need assistance just as badly as anybody else,” he said. “These folks, unless the veto of LB 1073 is overridden, are going to be left out. And there really is no excuse for that.”

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